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tv   [untitled]    May 18, 2011 8:30pm-9:00pm PDT

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future meetings. >> do we have a motion? >> i want to say thank you. i will make a motion. i also want to thank members of the human rights commission for your detailed and thoughtful questions. i could tell there was a lot of work that went into it on your end, and i appreciate that. i also want to recognize the work of our president, president mazzucco, because i know that he has met with members of the committee. with that, i move to adjourn. >> second. president mazzucco: all in favor? this meeting is adjourned.
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captioned by the national captioning institute
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supervisor chu: hello, and welcome to the regular meeting of the budget and finance committee. we will be joined shortly by supervisor chiu. our klerk today is mr. victor young. mr. young, do we have any announcements today? >> yes, please turn off all cell phones. if you wish to speak during public comment, please submit a speaker card to myself. items that the upon today will appear in the board of supervisors agenda on may 24 unless otherwise stated. supervisor chu: thank you very much. today we have our first day of budget hearings for the enterprise department. we will be hearing the permanent appeals for the national
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airport. before we begin with that, we have a number of items in the regular agenda that are ongoing items to dispense with. please call items #1 and 2. >> item #one. resolution approving amendment no. 1, retroactive to april 14, 2011, to domestic terminal food and beverage lease no. 03-0192 with j. avery enterprises dba klein's deli, and the city and county of san francisco, acting by and through its airport commission. item #two. resolution approving the lease agreement for operation and maintenance of public wireless- fidelity system at san francisco international airport between advanced wireless group, llc and the city and county of san francisco, acting by and through its airport commission. supervisor chu: thank you very much. we have [unintelligible] from the airport. >> good morning. the airport is seeking your approval for amendment no. 1 to
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our existing lease with j enterprises. they have six years left on their current lease to operate two concessions in terminals 1 and 3. due to appear closure in boarding area ee and the construction going on with american moving into terminal t2, they would like to amend the closing of their existing locations in order to consolidate into one expanded location in terminal 3. the amendment before you is to accommodate the new 10 year term and expansion of the deli in terminal 3. it would amend the rent to reflect increased square footage and allow for a
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suspension of the rent while clients are unable to operate. the airport is also seeking approval to reimburse the amortized cost put into the current bases that will now be unusable for a little while. the existing lease pays the airport a minimal guarantee of $66,000. you often see that on the beverage leases. whichever is greater. it is based on gross revenue. it would double everything to $112,000 per year. the budget analyst who has recommended approval, i would be happy to answer any questions you might have. supervisor chu: item number one. >> as indicated, the minimum
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annual guaranteed for the proposed lease would go up approximately 100% to $112,000.731 -- $112,731. there would be no rent for the period that the runner -- renovations are taking place, as well as repayment for the un- advertised cost of improvement. this will not have a direct impact on the airport's budget. as you know they operate under the break-even policy. >> thank you, commissioner. let's go to public comment on item number one. seeing no one, public comment is closed. can we take this item without objection?
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we have a motion to send this forward with recommendations. item number two? >> members of the committee, item #2 is approval of a new lease with the airport between the city and county and the advanced wireless group to provide free wire -- free wireless service. proposing an existing lease that will be replaced by the competitive proposal process. we have had a deal to provide internet access with passengers since 2003. initially it was a pay for service modeled. t-mobil paid a guarantee of $60,000 in the first year, then increasing the $125,000 per year in subsequent years.
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in august of 2010, the airport amended its release in order to switch to a free access model. in which case the airport began to pay between $135,000.100 $25,000 per month to provide at that point what we have heard from passengers have become an expected customer service in airport. this will formally set whitefly availability into place. the new contract is for the initial two years with three one-year options. under the contract, they would pay the airport $300.5000 in the first year of the contract. should the airport exercise the additional option, the annual guaranteed would increase by
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$100.5000 per year. i can answer any questions that you have. supervisor kim: a was wondering, how was the decision made to provide free why fly? >> we started looking at expanding a few years ago when the city was contemplating providing free internet service city-wide. at that point we were under contract with t-global under a pay to use service. we kept that contract in place until it could be modified to be changed. at that point it had become increasingly obvious that passengers expected to be able to access internet for free at the airport. it showed up a lot in the common cards. we did switch the contract at that point and it seemed very thoughtful.
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supervisor kim: this does not include domestic? >> no, it is airport wide. and the rental car center. supervisor kim: have we thought about providing wifi on our own in the airports? >> i know that that was part of the decision leading up to putting up the new rfp, but i do not think it made financial sense. supervisor kim: the advertising, i could not really understand the report in terms of the advertising. what does that mean, that the airport could also do the advertising? >> as a part of their advertising contract with us, they are allowed to advertise on site. there are many restrictions in
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terms of the size, it can only be on the opening page. there is a component of the contract that would allow the airport to also, at some point, sell its own advertising and realize the revenue on the internet opening page, but at this point we do not have any plans to do that. supervisor chu: thank you. supervisor mirkarimi: a quick question, is it completely free to the customers? or is there any kind of charge at all? i know that some airports require $9.95. or you are supposed to go through a service provider. >> this would be completely free. similar to -- i keep using sfgate as a model., they have an advertisement that you can go through.
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but there is no charge. supervisor chu: let's go to the budget analyst report. >> if you approve this lease, the airport will receive about $1,375,000 over five years. this appears to be an excellent deal that the airport has obtained. with t-mobile, the airport was paying? to provide the free white 5 service -- wifi service. now the airport will be receiving revenues. advanced wireless will be offered -- authorized to
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advertise on the opening web page. that is where they would get their revenue from. overall we think that this is an excellent deal, as i stated. and we certainly recommend approval of this resolution. supervisor chu: let's open this up for public comment. seeing no one, public comment is closed. supervisor mirkarimi: motion to accept the deal with recommendation and no that it is rare that a budget analyst uses the word excellent. [laughter] supervisor chu: by notice that also. can we do that without objection? thank you. item number three, please. >> item #3. ordinance appropriating $31,055,000, including $8,104,000 of general fund reserve, $14,851,000 of surplus laguna honda hospital revenues, $1,925,000 of surplus san francisco general hospital
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revenues, de-appropriating $6,175,000 of non-hospital operations expenditures at san francisco general hospital to fund cost overruns in the department of public health including $20,334,000 at san francisco general hospital and $10,721,000 at laguna honda hospital for fy2010-2011. supervisor chu: thank you. >> i think that those of you being with us over the years passed, the health department, it is not uncommon or unusual to wind up with expenditures for salaries that are that appropriated in the budget. there has been a long history of
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structures -- structural shortfalls in the budget associated with the attrition savings we are not able to realize in a 24/7 setting along with pharmaceutical expenditures. in years past, we have also generated sufficient surplus revenues for 100% of our additional appropriations. this is the first year we find that we are unable to do that. we found that we had a situation with one of our revenue sources this year associated with a hospital fee that through state legislation has been significantly reduced and other changes have brought it in significantly short of what was originally budgeted. we do need some funding from the state hospital reserve, from the
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state budget cut reserve to fund a portion of the supplement. you had a report from the budget analyst. there were recommendations that we agree with. i am certainly available to answer questions you might have. supervisor chu: i understand you are in agreement to reduce the supplemental? >> yes. >> as indicated, we analyze projections and our recommendation is to reduce by $1,560,187. our recommendation is displayed on page 8 of the report, where we recommend that any proposed more -- ordinance, that that be
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the reduction and because this appropriation does contain general funding reserve monies to fund the this appropriation, we of course have a corresponding recommendation to reduce the amount from the general fund reserve and we recommend that you approved the ordinance as recommended. supervisor chu: thank you for your report. supervisor kim: seeing as we already have $20 million in the reserve, by am curious to rescue what the thinking is in terms of the amount that we like to maintain in the reserve. a reduction of almost half of what is in the reserve, what will it mean for the city? >> you are referring to the
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general fund reserve. yes, that is correct, the city has traditionally always started out in past years with a $25 billion general fund reserve. however, it is not unusual during the course of the year that there will be supplemental appropriations coming from that reserve. this is one of them. of course, we would like to have a higher general fund reserve. i believe that their recommendations for the future are a general fund reserve that is going out. however, in this case, the mayor's office as well as the controller and in submitting next year's budget to you, they will have factored in this supplemental appropriation as well as our supplemental appropriation so, the persons involved and responsible are
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very aware of the situation and that when the budget comes over, as you know, it must be balanced before june the first. they will have considered this particular supplemental. supervisor kim: is it typical for us to draw down the reserve? and then moving up at the beginning of the next fiscal year with the budget? >> id is not typical for us to end the year with a $4 million general fund reserve. it is more common that that reserve be reduced from 25 tuck 2018, 22 over the last couple of years. the funds at the end of the year in the general fund reserve have a balance and, as indicated by mr. rose, that reserve is
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replenished. next fiscal year it will be replenished to 25 million. because the general reserve this year has been reduced down to $4 million, only $4 million will be used to balance next year's budget. supervisor chu: what are the three other supplemental appropriations before us? >> $8 million, the core role lawsuit, the sheriff's department, the fourth street bridge. there was a small amount for a number of small programs earlier in the year. we have a spreadsheet that keeps a count of all of that and i can have that brought bell during the course of this meeting. supervisor kim: thank you. this is a question for -- i do not know if it is for dph or the
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sheriff's department -- could you let us know what happened to be to to this decision regarding security and why it was determined midway through the year that you could not move forward with the board's recommendation? >> certainly. we actually appeared at a hearing a few weeks ago and i am happy to talk about it. it has been a little bit complicated, but i hope that i can summarize it briefly. for the last eight or nine years we have had a work order with the sheriff's department for all of our security. in the budget proposal last year we included a proposal to contract out hospital security that would have reduced the general time by a significant amount. given the size of the budget
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deficit that we were facing, it was difficult, presumably, for the board to not support that supplemental. funding the sheriff's work order was the other alternative. in the late part of the budget discussion there was a proposal to create a civil service security force. the plan was that we would have six months of work order and by january 1 we would have a fully deployed civil security force in san francisco general. when we started working out of plan we discovered to it -- two things. first, there was no way we could make that date, so we had to expand the work order pretty much through the entire year under any scenario. second was that the amount of funding in the civil service option for that six months was
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significantly understated in comparison to what we need -- we knew we would need to spend. such that the savings that had been built in with that option worked largely as something that would not be realized. the funding for that option did not include any funding to pay for paid time off, vacations, sick, backfill in an environment where every security person that does not appear to work for any reason has to be backed up by another employee. there was no front-end cost included to do the recruiting. uniforms, weapons of they were going to carry guns. no funding for leadership or management of that operation included in the supervision and management of that work force. there was no funding for the
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human resources department to do the job recruiting hiring and firing. a lot of time was spent on time lines and projections of what could be accomplished. we realize that we would not see the savings that were contemplated in the budget. we concluded that the responsible thing to do would be to bring this proposal back and reexamine certainly the sole service option. the contracting out option. and the sheriff work order option as a part of the budget deliberations for the coming year. supervisor chu: i am sure that my colleagues will ask about how we do quality control when we contract out to hospitals. i know that that has been a concern. in terms of when we have had reductions in grants, problems
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with work orders, has this impacted our ability to serve public health needs here in san francisco? >> we have had reductions in work orders? supervisor chu: problems and grants that led to the supplemental appropriations request. >> i actually have a slide that shows what happened with hospital fees. it will not be too difficult to take a look at it. can we get the computer display, please? supervisor kim: i cannot read that. >> you cannot read that? supervisor kim: maybe you can pass the information out but talk through it?
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what's the particular item that is causing a problem -- >> the particular item causing a problem had been a hospital fee that was not formally approved at the time that the budget was adopted. it was moving to the state legislative process and expected to be approved. there were a number of things that we did not know. we did not know for certain amount of funding that would come to the public hospitals. the way that the legislation was structured was that the hospital fee program was established where most hospitals would pay out to the state with a federal drawdown back to that same group of possibles. it was the same mechanism where funds could be raised to match federal moneys under the federal
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stimulus bill to fund private hospitals. public hospitals could not participate as funding for medical services came through separate wavered. there was a component that with a and give public hospitals a grant. at the time that we did the budget, we made assumptions on the effective data and also made some assumptions on whether that brown would be extended through june of 2011. what happened, in fact, as you can see on this next slide, we have budgeted $80 billion for this particular item. $23.5 million was removed in the first quarter of the financial statements, when the effectiv